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Stels [109]
3 years ago
14

McCoy’s Fish House purchases a tract of land and an existing building for $910,000. The company plans to remove the old building

and construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title insurance of $2,400. The company also pays $12,900 in property taxes, which includes $8,300 of back taxes (unpaid taxes from previous years) paid by McCoy on behalf of the seller and $4,600 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $45,900 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $4,000 and pays an additional $10,300 to level the land.
Required:Determine the amount McCoy’s Fish House should record as the cost of the land.
Business
1 answer:
Nina [5.8K]3 years ago
3 0

Answer: $972,900

Explanation:

The cost of land consists of the actual purchase price, and all other expenses that are necessary to make the asset ready for its intended use. In terms of land, all these expenditures can include title fees, unpaid taxes from previous years only (i.e. not current taxes), and other expenses need to physically prepare the land for use. The current taxes figure of $4,600 is not included here, as it is only owed during the current year, therefore normal accounting rules for taxes will apply. This figure will thus be treated as a liability until it is paid. The back taxes were aqcuired when the asset was aqcuired, and thus form part of the cost.

Old buildings that were on the land, may need to be teared down so that land can be utilised. The costs used to demolish the building also forms part of the purchase price. On top of that, to fully prepare the land for use the land may need to be landscaped and leveled. All these costs contribute towards getting the land ready for use, and are thus included in the cost. Sales made on any item related to the land, during the process when the land was still being processed for its intended use, will reduce the cost of the asset, and deduct this figure. This figure will fall under sales, which is an income to the business. The full calculation of the cost is as follows:

Purchase price: $910,000

Title insurance: + $2,400

Unpaid property taxes: + $8,300

Cost of removing building: + $45,900

Sale of salvaged materials: - $4,000

Level the land: + $10,300

Cost of land: = $972,900

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Esquire Inc. uses the LIFO method to report its inventory. Inventory at January 1, 2021, was $888,000 (37,000 units at $24 each)
kvv77 [185]

Answer:

the ending inventory and cost of goods sold for 2021 based on a periodic inventory system is $816,000 and $3,378,000 respectively

Explanation:

The computation is shown below

Cost of goods sold is

= (117,000 units - 114,000 units) × $24 + 114,000 units × $29

= 3,000 units × $24 + 114,000 units × $29

= $72,000 + $3,306,000

= $3,378,000

And, the ending inventory is

= (37,000 units - 3,000 units) × $24

= $816,000

Hence, the ending inventory and cost of goods sold for 2021 based on a periodic inventory system is $816,000 and $3,378,000 respectively

7 0
3 years ago
Suppose a new recreational neighborhood park would cost​ $20,000, including opportunity​ costs, to construct and maintain. if​ b
oksian1 [2.3K]

The decision to build the park or not would be based solely on the cost – benefit relationship of this project. Since there is no other factor considered in this problem, you only need to see if the benefit of constructing the park would exceed its cost. In this problem, the cost to construct the park is $20,000 while the marginal benefit would be $24,000 ($8,000 x 3 families that can benefit from this project). Therefore, you can say that the benefit has exceeded its cost. As a conclusion, the neighborhood park should be built because it benefits the families living in that area more than its cost.

8 0
3 years ago
The material wealth of society is determined by the economy's _________, which is a function of the economy's _________. a. inve
Yakvenalex [24]

Answer:

The material wealth of society is determined by the economy's productive capacity, which is a function of the economy's real assets.

Explanation:

Production capacity or <em>productive capacity</em> is the maximum level of activity that can be achieved with a given productive structure. The study of capacity is essential for business management in that it allows analyzing the degree of use made of each of the resources in the organization and thus have the opportunity to improve them.

<em>Real assets</em> are physical assets that have value due to their substance and properties. Real assets include precious metals, raw materials, real estate, agricultural land, machinery and oil. They are appropriate for inclusion in more diversified portfolios due to their relatively low correlation with financial assets such as stocks and bonds.

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3 years ago
when my supervisor presents me with multiple situations to see if i know when to implement a certain skill, (s)he clearly does n
Anit [1.1K]

When my supervisor presents me with multiple situations to see if I know when to implement a certain skill, (s)he clearly does not trust me to know what I am doing. The above statement is false.

<h3>What does skill refer to?</h3>
  • A skill is a learned ability to perform an action with predictable results consistently and well within a certain window of time or energy, or both. Domain-general and domain-specific skills are two common categories of skills.
  • For instance, in the field of work, generic skills like time management, teamwork and leadership, self-motivation, and others are useful in all jobs, whereas domain-specific abilities are only applicable to a certain position.
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To learn more about skill with the given link

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Question:

When my supervisor presents me with multiple situations to see if I know when to implement a certain skill, (s)he clearly does not trust me to know what I am doing. State whether the statement is true or false.

4 0
1 year ago
To manufacture 3,000 pairs of sandals in a week, a firm can use 3,600 workers and 135 machines or 270 machines and 3,300 workers
Nutka1998 [239]

Answer:

3,600 workers and 135 machines is more technically efficient.

Explanation:

a. For 3,600 workers and 135 machines

Worker technical efficiency = 3,600/3,000 = $120%

Machine technical efficiency = 135 / 3,000 = 4.50%

Average technical efficiency = (120% + 4.5%) / 2 = 62.25%

b. For 270 machines and 3,300 workers.

Worker technical efficiency = 270/3,000 = $9%

Machine technical efficiency = 3,300 / 3,000 = 110%

Average technical efficiency = (9% + 110%) / 2 = 59.50%

Conclusion

Since the average technical efficiency of 62.25% is higher than 59.50%, 3,600 workers and 135 machines is more technically efficient.

8 0
3 years ago
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